Colombia confronted in Scotch whisky tax spat

The Scotch whisky industry has welcomed a move by the European Union to end 'discriminatory taxes and monopolies' practices' in the Colombian spirits market.

The SWA complained of high taxes on imported spirits in Colombia

It came as the Scotch Whisky Association (SWA) said yesterday that the EU had requested formal consultations with Colombia on the issue under the World Trade Organisation’s dispute settlement understanding – the first stage in the WTO’s dispute procedure.

The SWA said the industry “struggles to compete” in Colombia because of high taxes on imported spirits “and the practices of provincial alcohol monopolies which distort the market by favouring local producers”.

By law, Scotch must be at least 40 per cent alcohol by volume, but Colombia applies a significantly lower excise rate to products at or below 35 per cent.

“This favours domestic spirits, the vast majority of which are bottled at this strength,” the SWA said.